Thursday, 17 September 2015

Nothing can be said to be certain, except Death and Taxes

(First appeared in New Era 8 April 2015)

This weeks’ column heading comes from a letter written by Benjamin Franklin, to Jean-Baptiste Leroy in 1789. The full quote is “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”
Last week I read with great joy that the pensioners would from now on be receiving an amount of N$ 1,000 per month. This news was provided by our President and confirmed by the Minister of Finance. If you remember dear reader, I wrote in the Consumer column of 28 January 2015, “.. would it also not be a sign of a mature country to provide sufficiently for our elderly with a state pension of at least N$ 1,200 per month? If we give this a little thought, perhaps we too can honour our mothers and fathers that our days on earth might be long.” It appears our political leaders have heard the voices of the masses and have shown their respect too for our elderly.
The 31st of March typically indicates the end of the financial year for government for government and the start of a new contract period for people like myself who work on an annual basis with a government department or institution. This brought me to the payment of personal taxes as I have to receive my Pay As You Earn (PAYE) slips and submit to the Ministry of Finance. This personal tax is after all the money that the Government earns and allows them to provide for bigger pension pay-outs for our elderly.
As consumers and taxpayers not all of us have the ability and expertise to always fill in our tax forms to the best possible advantage and thus receive the “tax breaks” enjoyed by some. For some taxpayers there even periods of time that they were unemployed and did not perhaps fill inn their tax returns.
I would like to propose to the newly appointed Minister of Finance that the government introduces a tax amnesty. A tax amnesty is a limited time opportunity for taxpayers (or a specified group of taxpayers) to pay a defined amount in exchange for which they receive forgiveness of a tax liability relating to a previous tax period without fear of criminal prosecution. In terms of an amnesty, I propose that the Minister give ALL Namibians an amnesty for all previous years that tax returns have not been submitted on condition that all outstanding returns are completed – especially for the period ending 28 February 2015 – before a set date. For example in this year, amnesty could be given until 30 June 2015.
An amnesty will allow the government to collect as much tax revenue as possible in a very short period of time. Typically all taxpayers should submit their returns before the amnesty closing date and in return the government can reduce penalties or even waive all penalties completely. This will allow taxpayers an opportunity to pay any outstanding taxes with fewer penalties (or no penalties) than might otherwise apply. For a taxpayer to qualify for the amnesty, they must pay the entire amount of taxes due by the program’s deadline.
Having spoken to many consumers, especially in the lower income brackets, it was noted that many did not have a lot of knowledge of taxes and simply accepted that the tax deducted by the employer (if they have a job) is done correctly. In quite a few cases it was found that taxpayers have not done the necessary paperwork and submitted their tax returns as expected.
Thus an amnesty must go hand-in-hand with a taxpayer education programme to assist in ensuring they too can benefit from the process. Taxpayers not only benefit through the services such as roads, etc. that the government provide, but can also benefit through tax returns if they qualify and know how to go about filling in the forms correctly.